Thread: How much does employee cost?

I thought through this myself and I am in the same boat. The way to get around it is to get a bunch of houses on the same street. To say they are 1/2 or smaller lots. Charge 35-40 a lot. 2 guys can cut 4 a hour easy. Well that's $140-160 so $70-80hr a person.

That's a viable plan for maint, we do that all the time. But for design install having your labor rate set at 60-80/mnhr is practically impossible to sale jobs. we do have to get creative with the math on that side of the business, most people cringe at anything above 55/mnhr.

Working man hours and billable hours are two different things as well. So even though you might be charging 60/hr, you need to determine what you billable time is on average. Say you have a guy that's costing you $20/hr including all labor associated costs. Then tally up the rest of your overhead and add that into the cost per hour based on a 40 hr week. Next, track all your billable time that you do on your own. Take into account, break downs, fueling up, loading and unloading in the morning/evening etc. Then add some extra time because no employee is going to work quite as hard or fast as the owner will. So if your average billing per man hour is more than your total overhead by a decent margin, then it makes sense to hire (provided you have enough work and equipment). If not, then try to change something - charge more, become more efficient, get better equipment etc. So say all my expenses (labor and EVERYTHING ELSE) comes to $35/hr. I'd need to be getting at least $40 per hour to make it worth it. That means 400 per man each 10 hr day. Do the math for your specific situation.

That's a viable plan for maint, we do that all the time. But for design install having your labor rate set at 60-80/mnhr is practically impossible to sale jobs. we do have to get creative with the math on that side of the business, most people cringe at anything above 55/mnhr.

well that you could get away with easier because you on the job longer. If you can sit at one place and not move to another job, ya, you would make money at $50 a hr. Its more about your daily average than your job rate because your daily average sets your job rate.

I thought through this myself and I am in the same boat. The way to get around it is to get a bunch of houses on the same street. To say they are 1/2 or smaller lots. Charge 35-40 a lot. 2 guys can cut 4 a hour easy. Well that's $140-160 so $70-80hr a person.

Unrealistic long term, although it sounds comforting it is not a viable business model.

Most neighborhoods have an avg lot size just go by that. Usually a "Lot" is 1/4-1/2 acre depending on the neighborhood. "LOT" must be a southern term LOL not sure what you yankees call it. LOL although I have seen lots that are 1-2 acres so who knows LOL